Lion of the Blogosphere

How the rich make life unaffordable for regular people

There’s a Wall Street Journal article about how very rich people are buying multi-unit apartment buildings and turning them into single-family urban mansions.

In September, Ms. Painvin bought a three-unit townhouse in Brooklyn with plans to convert it into a 3,000-square-foot home. “We were kind of floored at the amount of space you could get,” she says.

Libertarian types often ask “how does it hurt me if someone else makes a lot of money?” Well here is an example of how it hurts you, by making it unaffordable to live in the good neighborhoods of Brooklyn.

Written by Lion of the Blogosphere

April 1, 2016 at 1:20 pm

126 Responses

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  1. Yes, but the number of people who can do that is limited, and after you account for progressive taxation, it’s better to have them around. The city gets a lot of money from basically the wall street middle class.


    April 1, 2016 at 1:27 pm

    • But libertarians oppose progressive taxation.

      Anyway, I could see some of them blaming the government (after all, isn’t the government to blame for everything?). They might argue middle-class folks living in gentrified neighborhoods are pushed out due to rising property taxes.


      April 1, 2016 at 1:57 pm

    • It depends on the city. I know Toronto has a very specific mix that heavily favours owners and current renters… Low property taxes and strict limits on rent increases. Anyone who moved to the city in the last 10 – 15 years ends up paying vastly more for housing.

      Unless they’re rich enough to buy or poor enough to qualify for subsidized housing.

      The Syrian refugees coming in are paying less for a town-house than most people pay for a bachelor. Home owners in the down town core pay a mill rate about 20% lower than what people pay in the suburbs.


      April 1, 2016 at 2:10 pm

    • Is it “better” to have a small group of Wall Street rich people and milk them to provide handouts to a large underclass, or to have industry in the city (as there used to be) so that regular middle class people can get jobs?


      April 1, 2016 at 2:12 pm

      • industry is prole


        April 8, 2016 at 6:39 pm

      • “industry is prole” — not really, anymore. But so what if it is? Better the proles have industrial jobs than sit around cooking and taking meth.


        April 9, 2016 at 4:28 pm

    • Yeah, the city gets additional money, and some of it is redirected towards the poor, but there’s a lot of slippage due to bureaucrats working in City Hall, the school system, etc.


      April 1, 2016 at 2:43 pm

  2. This happens in Chicago all the time. A two flat will be turned into a single family home. Suddenly there’s lots of parking and wealthier kids go to the public schools. It’s a beneficial cycle but at least it’s recognized. They’re approving a lot more apartments because of it.


    April 1, 2016 at 1:47 pm

  3. This is totally ridiculous, Lion! What’s next, Marxism? These people are the best customers we have. They instal the best and most expensive equipment and pay generously. Nice people, too. Thanks to customers like this we, the tradesmen, prosper. A guy like this would spend $150,000 on his AC system. How much can you afford to spend on AC? Money talks, so be quiet.


    April 1, 2016 at 1:51 pm

    • What’s next, Marxism? These people are the best customers we have. They instal the best and most expensive equipment and pay generously. Nice people, too.

      Cut Lion into your installation profits and he’ll change his tune about the rich forthwith.

      The Undiscovered Jew

      April 1, 2016 at 5:11 pm

    • What you’ve just described is called “situational morality”. It’s where one’s values depend on their circumstances. You personally benefit from installing expensive HVAC systems for rich people so you like them. If you were harmed by it then you wouldn’t. That’s not morality. It’s self-interest masquerading as morality.


      April 2, 2016 at 4:00 pm

      • And claiming that a guy who buys a brownstone and turns it into a single family is hurting the working people is morality? Maybe in Zimbabwe, please….

        Incidentally, I wasn’t talking morality, just common sense. But if you want morality, here you go: envy, laziness and idleness are bad traits. Wanna brownstone? You maybe from those who will never be able to afford it and that’s just fine. And if you were in Cuba you wouldn’t be able to afford either. So just live on your level and don’t complain. This is such an un-American idea that a guy who betters himself in life is seen as hurting others and immoral. I really don’t get it: brownstone is beastly living. I do start ups in these places and I get fed up from schlepping up and down when there is a problem. You’ve got to be off your rocker to envy these guys. Please….

        Oh now we start slicing and dicing and putting these guys under a microscope. They are trust babies, they are value transferred, they are this and they are that. A 100 years ago a plumber could afford a brownstone and today only the rich can, so are you saying that’s because the rich had bought all the brownstones? Please… Be rational already.

        Read the biography of Ponzi, when he worked as a brick layer he could buy a house in a couple of years. Go show me a bricklayer today who can do this. There ain’t any.


        April 3, 2016 at 4:57 am


        This article from 2014 shows the average cost of a brownstone had increased 50% in only a year because people were turning brownstones into single family homes. When housing supply is restricted (as it is in New York) it absolutely harms the working class when supply is further reduced. That’s a matter of fact not opinion.

        You’ve insulted me by implication for acknowledging this reality. But you’re mistaken in so many ways. I don’t want to live in New York. I wouldn’t want to live in a brownstone. And I’d have no problem affording one if I did. That was neither my motive nor my point. My point was about situational morality.


        April 3, 2016 at 12:08 pm

      • Well, you are wrong. I’m happy for a person who buys a nice big house regardless of weather he installs a new AC system or not. If he chooses to save money by using window units, it’s fine by me. America is a land of opportunity where everyone can be successful. So he had a higher IQ, more education, good business acumen or even if he inherited the money, so what? Envy is a miserable trait. There is no ‘situational morality’ or whatever here. As it says in the Proverbs: ‘A fool folds his hands and eats his own flesh.’ (My translation). Don’t they say that a brownstone used to be a one family residence?

        I think this is a good thought: ‘If you want to praise – praise the Lord. If you want to blame – blame yourself’.

        A bulldog puppy costs north of $2,000. So what now? Whom are we gonna blame for that? A serval costs like $10,-15,000. It’s gonna die in a few years and it eats a lot. Who’s responsible? A freaking gold fish goes for $50, maybe Lion is gonna do a post about it. The only thing that is cheap is frog. Why? Because who wants a frog? In France even a frog isn’t cheap, because the eat the legs. Who’s responsible noww?

        I hope you see how ridiculous this line of thought is. I didn’t doubt that you’d read it somewhere, so I don’t know why you are insulted. With a name like destruction you shouldn’t be.

        This is excellent and should cheer you up.


        April 3, 2016 at 10:05 pm

      • Don’t miss the scene at the end where he gets the money on a plate. To get this money he came from Mongolia and became a Yokozuna. This is a UGEE achievement. This is the way to go in life, and not to complain.


        April 4, 2016 at 7:41 am

      • If you say your opinion is based on principle rather than self-interest then I won’t dispute it. I’m not a mind-reader. But the reasons you gave in your original comment were examples of “situational morality”.

        You may support a free market. And I agree that free markets generally produce net benefits. But that doesn’t mean people aren’t indirectly harmed by others actions. Of course people are harmed when demand increases the price of a scarce good. Bulldogs, servals and gold fish are luxuries people may want. But people need food, clothing and shelter. If supply is restricted the way it is with New York real estate then further restricting supply harms the working class. That’s a fact. Whether the wealthy should be allowed to do it, however, is an opinion.


        April 4, 2016 at 1:43 pm

      • The reasons I gave was to show that the rich (and owning a brownstone in Brooklyn isn’t rich by me) benefit working people. Like in any relationship there are advantages and disadvantages and you have to look at the total picture. Neighborhoods go up and down and you just have to go with the flow. Sometimes you win and sometimes you lose. America is about opportunity not envy or class struggle.

        Lion, we need a post on what it means to make America great again. You gonna do it?


        April 4, 2016 at 2:48 pm

      • “Like in any relationship there are advantages and disadvantages and you have to look at the total picture.”

        No one said otherwise. But the post wasn’t about the “total picture”. The post was about how the wealthy are making it unaffordable for regular people to live in the good neighborhoods of Brooklyn. Something that’s indisputable. Yet you have a great deal of difficulty acknowledging.

        “America is about opportunity not envy or class struggle.”

        I don’t need an immigrant telling me what “America is about”. You’re not American. You’re a wog.


        April 5, 2016 at 2:53 pm

      • If you’ve been paying attention, you should know by now that I don’t respond to to insults or slurs. I engage in a substantive discussion. A person buying a brownstone and turning it into a single family residence doesn’t register on my radar screen. It’s a non-event like buying a mushroom pizza pie. Try to process this.


        April 5, 2016 at 9:27 pm

      • Truth hurts. Do you need a safe space?


        April 6, 2016 at 3:08 pm

      • This is funny. Imagine an immigrant, legal or illegal, reading this post. He would think this is nuts! Here he comes to pursue his American dream and a guy named ‘destruction’ is writing about homeownership hurting the working class! He would think this stark mad!

        Now, Americans are generally very nice and friendly people, or at least this has been my experience. I think that the reason for this is the freedom and opportunities that America offers. Alexis de Tocqueville wrote a great book on the subject. He was technically wog, you know?

        The main quality of the Truth is not that it hurts, but that it sets you free. There is a verse in Ecclesiastis: ‘And gaining knowledge adds pain’ (my own translation). A chassidic rabbi commented: ‘It’s worth to add pain to gain knowledge’.

        So you are basically barking up the wrong tree. Maybe you should cut it out?


        April 6, 2016 at 9:42 pm

  4. And your solution is… what?

    Technology + population growth (immigration/globalization) = income inequality.

    There is no natural right to living in Brooklyn. If you can’t afford it, move. If the city maxes out at a certain size because of geographic constraints and commute times for service workers, so be it. Water finds its level.

    People who lack the skills to make high incomes don’t deserve the homes/cars/life-styles that people with high incomes get to have.

    I’m for very high rates of inheritance taxation. But I don’t begrudge high income earners their 3,000 square foot homes. (That’s actually not that huge.)


    April 1, 2016 at 1:53 pm

    • Rich people pull up the ladder of economic opportunity. Most of these rich are usually trust funders whose income comes from value transference professions that they got through connections anyway.

      You don’t need these people the same way you do not need an aristocracy.


      April 1, 2016 at 5:06 pm

      • Actually, I’d prefer an aristocracy to what we have now.


        April 1, 2016 at 6:18 pm

      • You’re wrong about the demographics of rich people. 86% of millionaires are self made. Trust fund kids are rare.


        April 1, 2016 at 6:39 pm

      • Yeah, an aristocracy doesn’t sound so bad. It’s hard to get fair representation in a pluralistic republic.


        April 1, 2016 at 7:21 pm

      • Aristocracy now? America is an antithesis of aristocracy. I actually think that aristocracy should be eliminated everywhere. They have no right to their wealth, it was gained under an exploitative social order and should be Confiscated by the people. In America, on the other hand, people make their own fortunes. George Washington or Trump earned their money and are entitled to it and I’m happy for them. The British royal family, like any other royal family, should be put out to work. Same goes for Russian oligarchs. Full confiscation and wealth redistribution is required. Aristocracy should be eliminated as a class! They are decadent parasites sucking people’s blood – that’s who they are.


        April 4, 2016 at 7:36 am

  5. A more likely answer is immigration. In London or NYC or any major city, immigrants live 10 people to a single house, and the price of housing becomes unreasonable for anyone that doesn’t want to live like that or isn’t rich.

    Much more common that a few uber wealthy buying up everything (outside of places like Hongcouver).


    April 1, 2016 at 1:55 pm

    • Isn’t that kind of living arrangement illegal? How does it persist?


      April 1, 2016 at 4:22 pm

      • “Isn’t that kind of living arrangement illegal? How does it persist?”

        Lol! Illegal! That’s rich.

        Yes, for white people it would be illegal and they’d suffer a rash of arrests and court dates and fines and god knows what kind of government harassment. When immigrants do it, the PTB mostly turn a blind eye.

        This is called anarcho-tyranny.


        April 1, 2016 at 5:00 pm

      • It persists because the police can’t crack down on it for fear of being called “racist”.

        The elites know that if they allowed the police and landlords to enforce the laws on the number of people who can live in each apartment without training the Eye of Sauron on them, heavily NAM cities like London or Los Angeles would experience a substantial decrease in the “diversity” of the city as the poor NAMs flee to somewhere they can actually afford to live without having to cram 20 people into a two-bedroom apartment.

        This would increase the prices that wealthy elites have to pay for nannies, maids, and gardeners, so they find it unacceptable. They’d rather pay their (often illegal) service staff minimum wage and have those people living in massively overcrowded apartments than pay a decent wage to their service staff so the service staff can afford to obey the law in their living situations.


        April 1, 2016 at 5:15 pm

      • The laws are not enforced against immigrants (duh). Not there, not here. They are not even enforced in the suburbs where I live — you can easily find suburban houses with a dozen immigrants living in them. If the police actually wanted to enforce the law, they could find such houses in a jiffy due to all the crappy, beat-up vans and pickup trucks parked out front.


        April 1, 2016 at 5:30 pm

      • “immigrants live 10 people to a single house, and the price of housing becomes unreasonable for anyone that doesn’t want to live like that ”

        I grew up with kids who came from families that had 10 kids. I think one family had 12. These are white suburban professionals too. it wasn’t a big deal. Also, in the 40’s or 50’s many families had 4-6 kids. The Brady Bunch had 6 kids, 2 parents and a maid in the same house. You don’t need that much room.I don’t like the govt telling people how many people can live in a house unless the govt gives them money to afford a bigger house. 2 bed apts in most buildings allow 5 people, so a 4 bedroom house with 10 isn’t that much difference.

        If you want to have an apt building that doesn’t allow it that’s fine, You don’t want 9 adult Mexicans living in a 2 bedroom apt.


        April 1, 2016 at 10:49 pm

  6. “public relations executive Morgan Painvin ”
    Sounds like a real value creator! No wonder the rest of the world thinks of NYC as a bunch of overpaid desk jockeys like this. I’m sure she could explain Fourier Analysis if asked…oh wait…


    April 1, 2016 at 1:58 pm

  7. So the woman being profiled has three children, apparently no husband (at least he’s never mentioned), and is a “public relations executive.” How much can someone earn in that field? She must be spending millions.



    April 1, 2016 at 2:05 pm

    • “How much can someone earn in that field?”

      Either A HELLUVA LOT or she has rich parents.

      Lion of the Blogosphere

      April 1, 2016 at 3:09 pm

      • I did a bit of cyber sleuthing and it turns out she does have a husband. However, he (named Arthur) has a pretty high privacy setting on his Facebook page so I couldn’t determine where he works. Morgan herself is executive VP for a “lifestyle” public relations outfit called Quinn, located on West 38th and with a branch office in Miami. It doesn’t seem to be a particularly large company.
        Fun fact: Morgan is originally from West Virginia.



        April 1, 2016 at 4:26 pm

  8. Also, she will need lots of non-white servants, maids, cooks, nannies, drivers, etc., so she will agitate for open borders and thus hurt the existing residents of America, especially the whites.


    April 1, 2016 at 2:09 pm

  9. Isn’t that just a reversion back to the way it was initially? Townhouses used to be one house.

    Dave Pinsen

    April 1, 2016 at 2:26 pm

  10. When I was a libertarian I would have been outraged by this post. Now I think it’s important to impose extra taxes on second homes, and ban foreign ownership of land.


    April 1, 2016 at 2:57 pm

    • Why can’t foreigner own land in usa? This is America pal. I understand limits on “national security” acquisition targets but just land or real estate?


      April 1, 2016 at 4:29 pm

      • If you want to increase the livability of this nation for its actual citizens, banning foreigners from owning land/property here is a good decision. It stops massively-wealthy foreigners from buying up properties as investment vehicles, which raises the price of real estate by taking tons of real estate off the market. This investment practice makes America less livable for Americans because it prices ever-increasing numbers of them out of the real estate market entirely.

        Rich Chinese people who want to keep their wealth out of the hands of the commies in their own country are already doing this.

        See here:

        And here:

        Of course, if you don’t care about making America livable for Americans, this won’t mean much to you.


        April 1, 2016 at 5:23 pm

      • We want them to go away. Therefore they should be prohibited from owning land, homes, or businesses here (in addition to being denied government benefits of any kind, of course).

        Many, many countries restrict foreign ownership of land. This would not be new or unusual.


        April 1, 2016 at 5:34 pm

      • Why should foreigners own American real estate?


        April 1, 2016 at 6:15 pm

      • Because they pay property taxes anyway and if not living here but merely using as investment vehicle they are not using up community services. More maker less taker.


        April 1, 2016 at 7:40 pm

      • Don’t be simple. Any time you allow others access you also give them influence. I don’t think foreigners should have any influence in our countries domestic markets and policies at all.

        The danger of foreign buyers gobbling up American homes

        This article supports Leon’s contention that the wealthy buying homes harms the middle class. In this case it’s the wealthy foreigners. Personally, I think rent controls and government subsidized housing do more to harm affordable housing for the middle class. But foreign buys still contribute to the problem.

        The US is losing hundreds of billions of wealth per year in trade deficits. If foreigner then come back and gobble up US assets whether companies or real estate it doesn’t take a genius to see that we’ll eventually be completely owned by foreigners. Now, I understand that “free trade” makes the GOPe all wet and tingly. I’m generally for free trade within our borders. But I have enough sense to take my own side against billionaires and foreigners.


        April 2, 2016 at 10:07 am

      • The Financial Times (super pro free market) had an editorial this week about corrupt Chinese government officials laundering money via western real estate.


        April 2, 2016 at 11:37 am

  11. The obvious retort is “Why the hell are you still living in NYC?”

    It’s a big country. Plenty of room to get away from people.


    April 1, 2016 at 2:59 pm

  12. A lot of the older buildings, townhouses, and brownstones in Brooklyn and NY that are currently multi-unit apartments were originally built as single-family urban mansions. Many of them are reverting back to their original use.


    April 1, 2016 at 3:17 pm

  13. Get out of New York. I did 5 years ago and moved to a prole city. The best move I ever made. Should have done it 30 years ago.


    April 1, 2016 at 3:20 pm

  14. Lion, the source of these problems has not been a natural progression of wealth inequality, but a monetary policy inspired bubble in all asset class in which the upper middles and above participate. You’ll see that NYC began its return to grace around the early 1980’s just as the secular 30 year bull market was taking off. This in turn was caused by the secular trend downward in interest rates (read: expansion of the monetary base by the Federal Reserve). This expansion of the base in turn generates profits for major financial firms in the form of constant refi’s, cheap debt which also helps drive merger and acquisition activity, constant capital stack adjustments, props up assets prices increasing balance sheet games from major financial institutions etc… This in turn makes use of tertiary economic actors to finance such as legal firms who do the due diligence and give opinions as well as providing future in house council candidates. This also provides business to PR and advertising firms (“choose Fidelity for your retirement needs!”) and various other “multiplier effects” in the economy. This game continues until you hit the interest rate zero bound (2009) and is peppered with occasional crashes as the system has intermediate points where people and corporations reach their limits to pay some of their debt thus necessitating the Fed to lower the “average ceiling” on interest rates every recession (politicians don’t want recessions to cure naturally and neoliberal economist priests back them up with Muh WWII and Muh FDR). We are currently at the zero bound which means the only way to continue our trajectory of monetary expansion is to push rates negative.

    Most of this activity benefits what you’ve dubbed the value transference class (I know you also include non financial elements as value transferers but those are typically fewer and do not leverage the legal/banking system to force their value transference and rob others). Bottom line is those with assets such as stocks and industry jobs in the NYC advertising/PR/Legal/Finance cabal benefit either in the form of big salaries or wealth growth. Most of this comes at the expense of people in the real economy because every dollar of credit emitted by the Fed devalues the purchasing power of the real economy. This is not to say law/advertising etc are not the real economy but merely that their benefiting directly from inflation of the monetary base directly benefits them at a rate that exceeds inflation (or rather deflation of the purchasing power of the currency). The benefit comes from their increased salaries due to more M&A, more refinancing and other financial activity, and more vaporware companies like Twitter, Facebook, Amazon, etc. not to say these enterprises are worthless, but they are all 10-20x overvalued and add to the monetary distortions and capital misallocations in our economy.


    April 1, 2016 at 3:42 pm

    • “The benefit comes from their increased salaries due to more M&A”

      Yes, and M&A is a huge job killer for people with real jobs. If I were Trump I’d add “no more big mergers” to my stump speech. Millions have been effected by these events over the years.


      April 1, 2016 at 5:03 pm

      • “no more big mergers”

        Good idea. Anti-Monopoly Act of 2016 just bans firms with more than, say, 25% of market share in an industry from all m&a activity.


        April 2, 2016 at 11:54 am

    • You have a poor understanding of monetary policy and banking. Money is a political construct. The need for monetary expansion in most countries is due to population growth and the nature of banking. Libertarians who do not believe money is political and is some sort of scarce commodity believe banks lend grandma’s savings. They don’t. They have always simply created money from nothing, and counted the newly created debt as an asset. This system has worked for century because it allows for decentralized creation of capital. A consequence is each new loan that is issued increases the demand for more money.

      A million dollar loan will require the borrower to pay back another million over the life of the loan. Where does this money come from?

      There are only two ways money can be created. By banks lending more, or by the issuing sovereignty running budget deficits, which spends interest free money into the economy.

      The negative interest rates are a trick by the banking class to delude the populace into thinking this is the only way to work the monetary system.

      In any event, the issue here is USD hegemony, which is coming to an end. Worldwide, the quantity of dollars will decline by probably 75% over the next decade as the world transitions to a system similar to Keynes’ Bancor. The main function of the federal reserve and all central banks is to coordinate exchange rates. This power will be ceded to the International Monetary Fund and World Bank, which is the very reason they were created in 1944 at the first United Nations Conference known as Bretton Woods.

      It was widely believed at the time that had Germany and Japan not had the option of printing as much money as they wanted, war would not have happened.

      • Actually, my understanding of monetary policy and banking is fine, but many seem to like purposefully obfuscating the matter and calling it obtuse in an effort to dupe the great unwashed into further self immolation.

        “Money is a political construct.”

        Agreed. Value however is not. At any given point in time an economy contains a set level of production. The amount of paper and digital ones and zeroes is irrelevant, but the government can use control over the money supply as a way to reward certain professions and punish others (as my banking and law example above clearly demonstrates). You can also punish classes of people (savers) and reward other classes of people (spenders). You can do the reverse as well. Ultimately both parties lose because capital misallocation and distortion make society net poorer.

        “The need for monetary expansion in most countries is due to population growth and the nature of banking.”

        Correct, but the United States has been expanding credit aggregates at a rate that’s anywhere from 4-5 times our population growth (7-10% per year versus 2% population growth). How else do you think the S&P500 could have gone from the low 200’s in the 80s to over 2000 at its peak in 2015? Did we really become 10 times more productive over the course of 30 years.. No. GDP growth has averaged around 2-3% growth during this same time. It has all been financial leverage inflating the value of assets (more credit dollars chasing the same levels of value/production in the economy).

        “The nature of banking” – please elaborate on this claim, it is extremely vague and can mean almost anything.

        “Libertarians who do not believe money is political and is some sort of scarce commodity believe banks lend grandma’s savings.”

        Libertarians are idiots, but you are also either willfully ignorant or purposefully lying when you say that banks don’t lend against grandma’s savings. They absolutely do. They don’t simply have access to unlimited capital without having assets to pledge against (Read: repo) in the open market with the Federal Reserve. Good luck trying to get the Fed to issue you money without selling them a bond or asset first (well same thing). Many of those assets are typically in the ABS, MBS, or Treasury space (mostly this), but where do you think the bank finds the money to buy these bonds in the first place? The cycle starts with commercial deposits (Grandma). The problem is balance sheets have multiplier’d far out of control due to extremely low interest rates and have been littered with complex financial derivatives that it is anyone’s guess at this point what is going on in those massive bank balance sheets, but make no mistake it all starts with Grandma’s deposits and it ends with Grandma’s deposits (being destroyed that is) as the bank’s real assets are asset stripped by the employees in the form of undue compensation and funneled out by other predatory financial institutions in the form of bad derivative deals, to be paid to their constituents.

        “A million dollar loan will require the borrower to pay back another million over the life of the loan. Where does this money come from?”

        A million dollar loan will require a million dollars plus interest. Interest is paid from monetary velocity increasing due to productivity (if the loan was made for value creation purposes as opposed to a bad loan) and routine day to day necessary spending of a hungry consumer base. The interest the bank earns is either paid to shareholders or depositors (same thing really just different positions in the capital stack) who then go and buy ice cream with the money allowing the cycle to continue. If the bank got stingy and just started to accumulate the interest to build capital reserves you might run into a liquidity problem. When the principal note comes due (if it’s a bullet bond), a refinance may take place if the bank deems the leverage levels of the borrower to be stable and further investment meritorious. If the bank deems the enterprise failing then assets will have to be liquidated to repay the loan, possibly destroying the value creating enterprise (a real liquidity crunch). Usually this does not happen because another actor with real money steps in and sees the value of an acquisition to save the otherwise failing asset (the entire basis for Private Equity). This is the real reason a functioning and healthy banking system is important. To avoid unnecessary liquidity crunch based value destruction (no this was not what happened in 2008 despite the claims of many in the mainstream financial media).

        “This system has worked for century because it allows for decentralized creation of capital.”
        This has never been the case. Banks have always been at the mercy of a centralized currency issuing authority except in limited instances such as the Andrew Jackson period, which turned into a total disaster with the US having multiple different currencies. Every time it has led to a consolidation of smaller banks around a central credit issuing authority. Banks do however behave as agents of the central bank, in a decentralized manner on a small scale to increase credit aggregates. The logical reduction of this job is the mortgage broker in a small town. Knows his clients well and lends money for the purposes of allowing productive investment in individuals. In turn the credit worthy mortgage assets are sold up the chain to larger banks with investment banking functions and ultimately the central bank in mortgage-backed securities packages to percolate additional credit back down through the system for additional people to get additional mortgages.

        “They have always simply created money from nothing, and counted the newly created debt as an asset.”

        No. Whenever that happens it is a naked short on the currency and leads either immediately or in a slow slightly more contained fashion (the US) to Weimar style hyperinflation. The Fed buys an asset off of a bank balance sheet (eg. a US treasury, an asset backed bond backed by consumer credit receivables, or theoretically an equity asset) and credits the bank with money. That is the ex-nihilo monetary creation you are referring to, but it most certainly does not come from nothing.

        “The negative interest rates are a trick by the banking class to delude the populace into thinking this is the only way to work the monetary system.”

        I have no idea what this means. If you are trying to say that the current monetary system can be saved without hitting negative rates then you really haven’t been following the actions of central banks over the last 8 years or so. Central banks never raise rates unless they smell inflation. Currently as is measured by central banks they see no inflation and hence try to stimulate demand (and thus spike inflation) through ever increasing incentives to borrow. We are at the zero bound now. The only way to further incentivize people to borrow more money is to pay them for it. Hence negative rates.

        “In any event, the issue here is USD hegemony, which is coming to an end. Worldwide, the quantity of dollars will decline by probably 75% over the next decade as the world transitions to a system similar to Keynes’ Bancor.”

        Source please. This is an extraordinary, almost conspiratorial claim.

        “The main function of the federal reserve and all central banks is to coordinate exchange rates. This power will be ceded to the International Monetary Fund and World Bank, which is the very reason they were created in 1944 at the first United Nations Conference known as Bretton Woods.”

        The main function of the federal reserve is to control credit aggregates and provide stable prices. That is in their legally charted mandate. Coordinating exchange rates is a byproduct of domestic monetary policy.

        “It was widely believed at the time that had Germany and Japan not had the option of printing as much money as they wanted, war would not have happened.”

        Ok. This is a politically very naive statement but is not particularly relevant to the discussion either way.


        April 2, 2016 at 1:32 pm

      • @TickerReader,

        Can you recommend a basic textbook on monetary policy?


        April 4, 2016 at 6:07 pm

    • Your basic analysis is correct. An entire generation (my entire adult life), and then some, of people have benefitted enormously from the Federal Reserve and its masters, the banking/wall street cabal while contributing zero to actual productivity and wealth. But when it all crashes? When interest rates go negative? The Fed can endlessly print money but can’t print credit worthy borrowers.


      April 1, 2016 at 9:27 pm

  15. First we discuss people’s personal life, now we are counting their money. What’s next? 1984? I can’t believe this!

    Incidentally, a brownstone made into single family is no big deal. It’s not even comfortable to run up and down the whole day. Crazy way to live if you ask me. I do work on much more expensive properties and the rich people are nice. What you guys have against rich people? Who stops you from working? Robots? Well, I was on a construction site today and I saw plumbers, painters, alarm installers, wood workers – everyone was there, but no robots!


    April 1, 2016 at 4:03 pm

    • They are subversive, globalist pod people. Are they “nice”? Yeah, so what? Every policy they support undermines the country.


      April 1, 2016 at 5:11 pm

      • Wow! These are customers! And even if they were not, I should feel antagonism to every successful person because he could be a leftist, or a globalist, or support open borders? Come on already! Be rational.


        April 4, 2016 at 7:20 am

    • You haven’t been here long enough yet, Yakov. Tearing apart rich value-transferers is a past-time here. We’re generally okay with value creators who do well for themselves, but value-transference is another story.


      April 1, 2016 at 5:23 pm

    • All things being equal, I don’t care what someone else makes. Where I grew up, there were rich people. But the ones I knew still put their pants on one leg at a time. There weren’t that many with the kind of money to significantly affect other people’s lives. But that’s no longer the case. The wealth gap has exploded and there are thousands of billionaires. And they are using their money to affect other people’s lives through cronyism and influence. Libertarian principles have limits. Outside of those limits they no longer apply. Libertarian principles don’t apply to foreigners or people worth hundreds of millions.


      April 2, 2016 at 10:18 am

    • Most people here don’t care about making America great again. They talk about preserving our culture while mocking traditional values and spitting on American prestige. They think that will turn us into Hobbits, but it won’t. It will just set up cardboard cutouts of Hobbits in a wasteland.


      April 2, 2016 at 8:23 pm

  16. My job is to help these people get city approvals to convert their multiple dwellings into 1-family houses so cannot complain too much about them. A lot of rich people people also combine 2-3 apartments in an apartment building into a giant single apartment,

    These people are bringing in much needed tax money. We should tax them extra if the home is a 2nd home. Charge even more if the owners are foreign.


    April 1, 2016 at 4:15 pm

    • Considering what the tax money is already being spent on, I don’t think government needs more of it.


      April 2, 2016 at 3:46 am

  17. OT: Lion fodder. Girl gets into five Ivies and shares her application essay with the world.

    I think it’s pretty foogin’ stoopit.


    April 1, 2016 at 4:16 pm

    • I think it’s an inspiring story of how a prole Hispanic girl managed to become a SWPL and look down upon the consumerist unhealthy-food prole culture before her high school graduation.

      Lion of the Blogosphere

      April 1, 2016 at 4:32 pm

      • How is Brittany Stinson a Hispanic girl?


        April 1, 2016 at 5:07 pm

      • I’m kvelling here, but also angry.

        My nephew got a perfect score on his ACT. Had a 4.0 GPA. Played sports (Lacrosse, Football), volunteered, plays music and couldn’t get into his first choice (MIT). And he is extremely gifted at math too. Been going to a special math program at University of Chicago since he was 13. He didn’t give a shit about any of the Ivies or other east coast elite schools, just wanted MIT. Oh, well. He will do fine at Michigan or Illinois.

        My niece got 20 points shy of a perfect score on her SAT. Participated in every activity imaginable. Perfect GPA. Wait-listed at most of her first choices (GTown, Williams, Amherst). Full academic scholarship to second tier schools (Tulane, Northeastern). Only top tier school accepted to at this point is Barnard. Still waiting to hear from Penn, Brown, Yale.

        They are conventionally liberal kids. I wonder how this experience of being passed over for demonstrably inferior applicants will affect their world view?

        As a condition for accepting a dime of federal money, the admissions processes at all universities should be audited and the results published.

        Oh, BTW, if any of you have kids, nieces or other significant other youngsters I learned from my nephew that the University of Alabama offers full academic scholarships (to out of staters too) if one surpasses a certain threshold on the ACT/SAT. No worries about GPA. Just do well enough on the tests. Not a bad deal. Alabama is a good enough school. Spread the word.


        April 1, 2016 at 9:47 pm

      • Lying.

        At least she does not have any middle-class pride.


        April 1, 2016 at 10:06 pm

      • Daniel:

        Explaining too much about what happened could get them in trouble at college, so I’d portion out the truth slowly. You should definitely tell them, just be slow about it until after they graduate.


        April 3, 2016 at 1:01 pm

  18. Move to Denver to seek our fortunes?

    NYT, 03/31/16 – The Cities on the Sunny Side of the American Economy

    The Denver metropolitan area has become a showcase of the sunnier side of the American economy…According to the latest figures available, the Denver-Aurora-Lakewood region had an unemployment rate of 2.7 percent, the lowest of any metropolitan area with a population above one million. (The national average was 4.9 percent in February.) A recent report by the Leeds School of Business, at the main Boulder campus of the University of Colorado, predicted that the state would gain more than 65,000 jobs in 2016…The relative lack of racial and cultural diversity (the state is 87 percent white) can deter some people from relocating [feature or bug?]

    I’ve been downhill mountain biking in the Rockies, but other than in and out of DEN, I’ve never visited Denver. I don’t like the winter, so it’s a no go for me.

    E. Rekshun

    April 1, 2016 at 4:25 pm

    • Denver is very nice, especially if you are a SWPL or a hipster but homes are expensive there compared to Texas, and it IS colder. Austin would be a better choice.


      April 1, 2016 at 9:55 pm

  19. Typically, the reduction in the number of units by wealthy people combining units would not impact prices, because new housing would be constructed. In NYC, where the city has increased the cost of construction to over $2000/square foot (beautiful construction costs outside of NYC are $200/sf), the supply of housing is artificially limited. So what you are seeing is actually primarily a failing of government. And you want more government?


    April 1, 2016 at 4:40 pm

  20. OT, this is a really good compendium about the Gang of Eight and how getting rid of scumbag Eric Cantor was so important:

    Next up, Paul Ryan. All of them need to GO.


    April 1, 2016 at 4:47 pm

    • We can’t get rid of Paul Ryan because the cucks of Wisconsin love him. America is filled with cucks.

      Otis the Sweaty

      April 3, 2016 at 12:15 am

      • American the Cuckiful? LOL. Or how about Cuckmanistan? The possibilities are endless.


        April 4, 2016 at 8:46 pm

  21. This is what makes NYC expensive: any average schmuck can be a player

    A Reader

    April 1, 2016 at 5:18 pm

    • The article is bogus.

      Lion of the Blogosphere

      April 1, 2016 at 6:19 pm

      • When visiting, I have been to bars that are 2:1 girls/guys. It won’t work on Manosphere introverts.

        A Reader

        April 1, 2016 at 6:25 pm

      • I’m not sure I would call it “bogus,” but I think it’s reflective of a classic problem: When it comes to romance, people have a tendency to have unrealistically high standards. That’s why girls perceive that there is a shortage of suitable men while at the same time men perceive that there’s a shortage of suitable girls.

        That said, I do think that Manhattan has a male/female ratio which is favorable to straight single men. I met my wife in grad school in Manhattan and she is frankly better looking than me and has a higher romantic market value than me. If you are a girl looking to meet a man in college or grad school, you would do well to avoid places like NYU or Columbia.


        April 2, 2016 at 8:56 am

      • My only point is that the SWPL writer of the article doesn’t understand what a “college degree” means. Women with bottom-level college degrees are socioeconomically matched to high prole men.

        I think the NYC metropolitan area as a whole isn’t especially man-friendly, but the women concentrate in Manhattan. If they are willing to date someone who lives across a bridge, then there’s no man-shortage at all. Of course, some aren’t.

        Lion of the Blogosphere

        April 2, 2016 at 9:08 am

      • Women with bottom-level college degrees are socioeconomically matched to high prole men.

        And women from good but not great schools are matched to middle class men. When degrees are filtered by quality, assortative mating may not be leading to stratified mating choices anymore than they always have.

        The Undiscovered Jew

        April 2, 2016 at 12:21 pm

      • The reality is that female hypergamy is at its finest in Manhattan.

        Single White American women live and congregate in the most expensive and desirables areas of NYC, where they only date White men in the same vincinity or those with status (prestigious career and salary) elsewhere.

        To clarify Lion’s issue with prole women. Most White women who live in Manhattan are not in the category, where he labels them as prole.

        To make your post sour again, with my anti-American rhetoric. We are living in an age of a zero sum game principle reminiscent of 3rd worldism. Wealth inequality, dating inequality, social inequality…etc. they’re all definitive of the entire Anglo-Cesspool-Sphere.


        April 2, 2016 at 4:01 pm

    • I recall reading similar articles a while ago, and perhaps even commenting here about one, so it seems quite reasonable to me. As I recall, the situation on campus (60% women) was that at least half of the men were still unacceptable while female competition about the remaining ones created slutty harems for the winner half. In short, it seems women love sexual cold war drama and complaining about “guys being guys”. (Surprise!)

      (Another article showed that the same goes for Tinder.)

      Alas, the advice at the end: “To find a mate, college-educated women should consider dating working-class men.” … has already been shown not to work, plenty of times. Women loathe men they consider beneath them.


      April 2, 2016 at 4:33 am

      • The category of “college-educated” women includes women who took ten years to graduate from community colleges, and they are in the same social class as blue-collar men with high-prole jobs, so the notion that there’s a socioeconomic mismatch between men and women is total hogwash.

        Lion of the Blogosphere

        April 2, 2016 at 7:53 am

      • Think of it this way: The prom king and queen in Lima Ohio both finish college. The king goes home buys a house and drinks beer. The queen wants “fun” and “romance” (she likes Sex and the City) that Ohio is devoid of. She heads to Chicago or New York. This creates a gender imbalance in favor of guys. Plus, from what I have been told and can see, the best looking guys in New York are all gay.

        A Reader

        April 2, 2016 at 3:11 pm

  22. It’s pretty obvious that it’s the poor and not the rich that make life unaffordable for regular people. It’s these hords of people on section 8, food stamps and Medicate that make it impossible for a working person to compete. This is a no brainer, why are we even discussing it? A section 8 family has no problems paying $2,000 – $2,500 for and apartment and this is what drives the price up. Also, all these yuppies living 3-4 to an apartment and each paying $1,000. These are the rotten apples, not the rich. Anyway, making a brownstone into one family is nothing. Beastly living it is. The rich have elevators and would never shlepp up and down all day. This maybe shticky, but not really rich. You make me laugh already. What rich guy is gonna run up and down the whole day in his own house? I wouldn’t do it and a rich guy would? Say you Lion, would you do it? JS or MaryK would never do it.


    April 1, 2016 at 6:17 pm

    • People on both ends of the financial spectrum make life unaffordable for the middle class, and remember that there’s a symbiotic relationship between the rich and the poor, because the rich need poor people to be their house servants and provide other labor cheaper than white middle class people would care to work for.

      That’s why Nantuckett Island became a worse place to live when super-rich people started moving there and building massive mansions

      Lion of the Blogosphere

      April 1, 2016 at 6:22 pm

      • Yes, the rich live in cities for the cheap labor intensive amenities like restaurants, hairdressers, grocery stores, all the various gourmet shops, entertainment, etc. The army of workers manning these services have to be poor by definition. If they weren’t poor or could make more, they wouldn’t be cleaning up after rich people, doing their hair, serving them food, etc.


        April 1, 2016 at 8:16 pm

      • @Bob

        False. They’d still be hairdressers, fry cooks, and grocery store cashiers, but the income divide would be narrower. instead of the multiple being 10x for wage differential it’d be a more reasonable 2-4x.


        April 2, 2016 at 1:43 pm

      • Manhattan’s menial workforce isn’t White.


        April 2, 2016 at 4:11 pm

  23. OT – Do you have Canadian readers? Were I Canadian and saw my prime minister posed this way, I’d be embarrassed (granted ours is embarrassing enough).


    April 1, 2016 at 6:33 pm

    • That guy is a walking embarrassment.


      April 2, 2016 at 4:35 am

      • He might be a buffoon, but I’ll take him anyday over anything what we have south of the Canadian border.

        Furthermore, he supports in Quebec Separtism. Not one of our politicos support an independent nation with a White identity.


        April 2, 2016 at 4:16 pm

      • I’ve said previously that Montreal comes across as a multicult city, but with a White civic culture.

        What does this mean? They don’t play the Bill de Blasio spiel about putting non-Whites in every nook and cranny, to suit a false equality agenda.

        On the other hand, Anglophone Toronto and Ontario province, is just another New York City in Canada.


        April 2, 2016 at 11:23 pm

      • JS, have you moved to Montreal yet?


        April 4, 2016 at 9:24 am

    • Canadian reader. I hang my head in shame. The half-wit dude bro PM.

      Winston Smith

      April 2, 2016 at 7:18 pm

    • Not officially. I’m currently on a tourist vista, which allows me to stay in Montreal for 6 months. I’m also back and forth with NYC, taking money from my value transference clients and bringing it with me to Montreal.


      April 4, 2016 at 10:27 pm

  24. Daniel ,
    There is a lot of nonsense about SAT and Ivy. Only 2100 people get a >2360/2400 score . 45% of them are admitted in Harvard Yale Princeton (1000 people ). So contrary to the common opinion , top 1 in 700 are almost auto admit .
    You see that the score are true because only Harvard Yale And Princeton have top quartile score at this Level. caltech is at 2350 even if it has the highest average and the quartile is only 50 people. Too 1 % is still though got white in the best universites but Not for 2380 !
    I think your niece lied to you about her score !

    Bruno from Paris

    April 2, 2016 at 4:22 am

    • No, those are their scores. Confirmed by their parents, who are less overwrought than the kids. Their attitude is, “what can you do”. In fact, my brother hopes she chooses Tulane, because they offered a full academic scholarship, but he had promised her that he would pay for whatever is her choice. Getting into elite colleges, it is not like it was back in the day for those of us in our 40’s, 50’s ad 60’s. The process is ridiculously competitive and cryptic.


      April 2, 2016 at 3:09 pm

  25. Most townhouses in Brooklyn and Manhattan were single family residences until they were broken up into individual apartments for economic reasons in the past. Now you’re complaining because the townhouses are being returned to their original design.

    Mike Eisenstadt

    April 2, 2016 at 7:49 am

  26. OT again, but I think we are only about 10 years away from android companions:


    April 2, 2016 at 10:34 am

  27. Is it good to not be a prole? If so, why?

    John S

    April 2, 2016 at 12:58 pm

    • Who cares? It’s good to be yourself and not a phony.


      April 3, 2016 at 2:35 am

  28. You can definitely tell the economic class of most of the people here. I don’t have a problem with this at all. But the arguments that everyone benefits from this is weird and the lowest form moral rationalisation. Much better to eschew ethics completely than to pay lip service to it. Something the liber-retardians are very wary of doing explicitly.

    The Philosopher

    April 2, 2016 at 1:28 pm

  29. Lion, that’s a triplex for the well-to-do that was originally a 1-unit to begin with, not a multi-unit.

    I doubt the Brooklyn libertarians could care less and maybe point out people have been leaving the borough for years for many, many other regulation-induced reasons.

    I would like to read your thoughts on the new $15/Hr wage and whether it’s really about pushing the poor out of NY and Cali who won’t work for less in a union job (the unions may arrange a lesser wage).


    April 2, 2016 at 8:39 pm

  30. This deserves a blog post.

    Charles C. Foster, Ted Cruz’s Pro-Amnesty Money Man

    Ted Cruz really is a creep but the TrueCons just don’t care.


    April 3, 2016 at 1:19 am

    • #LoseWithCruz

      Lion of the Blogosphere

      April 3, 2016 at 1:26 am

      • Lion

        I’ve been reading you for a long time and this thread may be the best yet. I agree that Yakov is the best commenter on here. However, I wonder if he is as working class as he says? I know many people who work with their hands and none have a vocabulary approaching his.


        April 5, 2016 at 2:21 pm

      • @Goalkeeper,

        This was a great thread, esp. the exchange between Ticketreader & Helmut Schmidt, not that I understood a word of it.

        As regards Yakov, I think he’s pulling our collective leg. Total internet fraudulence, down to the fake name, and the fake persona. Hilarious, though!! I always read his comments.


        April 5, 2016 at 5:54 pm

      • He’s definitely very knowledgeable about Orthodox Judaism. Of course he’s using a fake name, everyone who posts here uses a fake name. I wouldn’t want anyone to post under their real name.

        Lion of the Blogosphere

        April 5, 2016 at 6:44 pm

      • Agree. But this Yakov Smirnov routine?…..

        Are you going to live-tweet tonight’s primary?


        April 5, 2016 at 7:33 pm

      • Isn’t Yakov a former practicing lawyer?

        Lion is only a law graduate.


        April 5, 2016 at 8:22 pm

      • Yakov is a Ruskie to say the least.

        And he also mentions a lot about Russia’s satellite region, namely, Central Asia, and their Jews, Bukhara Jews and Jews in Tajikistan.


        April 5, 2016 at 8:27 pm

      • ‘ Of course he’s using a fake name, everyone who posts here uses a fake name. I wouldn’t want anyone to post under their real name.’

        Reminds me of a story. Once Richman was visiting a sick person in a hospital on Shabbat. He couldn’t take the elevator and was walking up the steps. On his way he stopped to catch his breath at the psychiatric floor without thinking much about it. So the nurses asked him who he was and he answered:
        – ‘I’m Reichman’.
        – ‘Look, it’s another one!’ , they said as they took him in for processing.

        I like my name, it’s both Jewish and Russian. The best of both worlds, so to speak.

        JS, how many times I have to tell you that I’m a jailhouse lawer? I’d never been to law school, only the school of hard knocks.

        Communists believed in educated proletariat. Lenin had famously said: ‘Cadres decide everything!’ I agree with Lenin and was a beneficiary of that particular aspect of the system.

        Many Talmud in sages were tradesmen and they had excellent vocabulary. I was a beneficiary of Yeshiva education and agree that trades are a dignified occupation.

        Mates, dont get twisted, I’m trying to keep it real.


        April 5, 2016 at 10:02 pm

    • TruCons must be destroyed. And they will be.

      If Trump has the nom stolen from him, Cruz will lose by double digits. Ending American Conservatism forever.

      Otis the Sweaty

      April 3, 2016 at 8:36 pm

      • @OtS,

        So, how do you see the future if Trump doesn’t get the nom, by fair means or foul? Should the “revolution” continue to take over the Congress? What’s in your crystal ball? Spill the beans!


        April 5, 2016 at 6:04 pm

    • If Trump has the nom stolen from him, Cruz will lose by double digits.

      In that case it won’t be Cruz who is awarded the nomination.

      The Undiscovered Jew

      April 3, 2016 at 9:29 pm

  31. This crazy idea you can have a stable society of just rich and poor is a deluded fantasy. These cities are a dark dystopian future like cyberpunk. The rich areas are surrounded by police, walls and private security similar to what you might see in a prison, meanwhile the poor areas are third world ghettos that even the police are afraid to enter. The only reason they function at all is that there is a working class able to commute from outside to provide the services and the functions necessary to maintain life. In a major blackout or interruption of service these places turn into Africa with roaming bands of hunting parties looting and raping with impunity and police in riot gear trying to protect the Rich areas from being overwhelmed by a Zulu Dawn. How long could this survive and exist on its own? Not long.

    Joshua Sinistar

    April 3, 2016 at 10:34 pm

  32. The rich by and large favor mass immigration. A fact not yet mentioned is that virtually every immigrant makes the rest of us poorer. Not just in the obvious way of driving down wages, but because we owe our high standard to high PER CAPITA investment in infrastructure, buildings, factories, and education.

    When the immigrant moves here, he does not bring with him road lanes, hospital emergency rooms, school class rooms, his own apartment, his own water and sewer treatment plant, and so on. Those fixed investments must all be shared with the new arrival.

    The one possible exception to the rule that every immigrant makes us poorer would be an immigrant with a million-dollar medical degree or engineering degree that he acquired outside the United States. Even then, once he brings over his spouse, kids, grannies, aunts and uncles, the benefit of his expensive education probably washes out.

    Mark Caplan

    April 4, 2016 at 6:35 am

    • Come on, now! You think Stalin’s daughter or Krushchev’s son made America poorer? He’s got like half a dozen PHDs. America needs people like this.


      April 5, 2016 at 9:43 pm

    • Destruction, you also pay attention.


      April 5, 2016 at 10:14 pm

  33. Lion, check out #panamapapers.


    April 4, 2016 at 2:05 pm

  34. Manhattan’s clear view, luxury fortresses are more prestigious than anything you find in dusty Park Slope.


    April 6, 2016 at 12:39 am

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